| Good morning Voornaam, The busy week on the markets continued yesterday, with a lot of important updates. Aside from Anglo American placing Anglo American Platinum shares in the market at a significant discount (as I feared), there was also mining news (of a far more positive nature) from Pan African Resources. On the construction side, we saw a decent trajectory at Murray & Roberts but still a long way to go, with that group heavily exposed to the mining industry.
In property, Growthpoint thanked its lucky stars once more for the V&A Waterfront and the joys that the iconic investment seems to deliver year after year. It is absolutely the jewel in the Growthpoint crown. As for the broader performance though, earnings have dropped by 10%. At sector peer Hyprop, distributable income per share is down by 8.7%, which is better than guidance but still a significant decrease. High interest rates have been hurting all the property funds and especially those with broad exposures.
Another company on the wrong side of interest rates is Super Group, although they have other major challenges as well like the underlying exposure to the German economy. There is substantial exposure in that group to the disruption currently taking place in the automotive sector. I don't usually share my work in Moneyweb in this mailer, but my latest Supernatural Stocks podcast is relevant here as I covered the threat of China to the global automotive sector. Go check it out and add it to your podcast player, as I release a new podcast each week.
Moving on, Mustek is an unfortunate tale of what happens when a market disappears from underneath you. Having done well out of providing load shedding solutions, the business was suddenly left high and dry by Eskom's miraculous improvement.
All these stories plus the Little Bites can be found in Ghost Bites, your one-click SENS summary at this link>>>
I'm very excited to be able to share the latest episode of The Trader's Handbook with you. This is episode 6 and the library of knowledge that I'm putting together with IG Markets South Africa just keeps growing. In this episode, we covered trading signals, market trends and important indicators. I strongly recommend listening to this show (and there's a full transcript available as well).
Have a great day!
PS: you like the Springboks, don't you? Well, if you refer five friends to Ghost Mail, you stand a chance to win 2x tickets to the Argentina game later this month! Made possible by my Ghost Mail partners, you can find the referral link here. |
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| FEATURED: The Trader's Handbook Ep 5 |
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| | | IG Markets Episode 6: Traders have a variety of important trading signals and indicators that they look at to understand market trends and predict where things are going. Learn all about it at this link>>> |
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| FEATURED: How to Build a Bull Case |
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| Magic Markets: The art and science of investing requires critical thinking and being able to make arguments for and against an investment. In this terrific episode, we run through the way to build a bull case when analysing a company. Enjoy it here>>> |
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| FEATURED: A responsible investing roadmap |
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| Investec Wealth & Investment International has launched a comprehensive guidebook on responsible investing. In the latest episode of the No Ordinary Wednesday, Jeremy Maggs speaks to the authors, Boipelo Rabothata and Maxine Gray. Enjoy it here>>> |
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| FEATURED: Mastering your portfolio with ETFs and single stocks |
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| | | Ghost Stories: Doing your own research is a great concept and all, but how do you actually do it for both ETFs and single stocks? In this podcast with Siyabulela Nomoyi of Satrix, we dug into this topic. Find it here>>> |
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| Add these to your playlist: |
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| Ghost Wrap: In this fast-paced podcast, I covered CA Sales Holdings, RCL Foods + Rainbow Chicken, Motus and Bidvest. Made possible by the support of Forvis Mazars, you can find it here>>> |
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| Magic Markets: Comparing India to China is fascinating at the moment, with the former going from strength to strength and the latter losing its shine - for now, at least. To understand some of the structural differences between these critical emerging markets, listen to this show>>> |
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| Ghost Bites - local company news: |
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| Ghost Bites: The latest on Anglo American, Anglo American Platinum, Growthpoint, Hyprop, Murray & Roberts, Mustek, Pan African Resources and Super Group along with various Little Bites in Ghost Bites here>>> |
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| International Business Snippet: |
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| After mentioning the other day that Big Lots has filed for bankruptcy protection in the US, I have another example for you that is hot off the press (or griller?) that reminds us of the risks of equity investing: BurgerFi.
This US restaurant chain went public in 2020 when Special Purpose Acquisition Companies (SPACs) were all the rage. Basically, interest rates were zero and people could go to market to raise hundreds of millions of dollars as effectively a blank cheque to go off and do acquisitions. It's like venture capital, but with money from the public. What could go wrong?!?
Unsurprisingly, quite a lot could go wrong. BurgerFi filed for Chapter 11 bankruptcy protection this week, with debts way in excess of assets. The group is loss-making and same-store sales at its upmarket burget chain have been dropping.
Equity investing is risky. It's a lot worse when a strategy of hit-and-hope is being used.
Our latest research in Magic Markets Premium is on Dollar Tree, a retailer in disarray. My partner in Magic Markets, Mohammed Nalla, has described it to me as "one of the ugliest charts you'll see" - and the reasons why will be a great learning opportunity for our subscribers this week. |
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| IG Morning Call: daily macroeconomic update |
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| US equity markets shrugged off slightly higher than expected Core CPI data yesterday to close the session in positive territory. The inflation print suggests a 25 basis points rate cut (rather than a 50 basis points cut) at the Federal Reserve’s Open Market Committee (FOMC) meeting next week.
European futures and Asian equity markets are following suite, trading firmer this morning, expectant of a positive start for the JSE All-Share Index as well.
The dollar was firmer overnight, pulling the ZAR off its best levels of the day.
Oil prices have started to rebound from oversold territory as near term production in the US is threatened by Hurricane Francine.
Gold prices are trading relatively flat in early trade.
The European Central Bank (ECB) meeting today will be a key focus for traders. Markets have priced in a 25 basis points cut, although will be looking for clues as to how much rates could be lowered further this year.
Key Indicators: USD/ZAR R17.90/$ | US 10yr 3.66% | Gold $2,517/oz | Platinum $960/oz | Brent Crude $70.90
The macroeconomic update is based on IG's morning call update |
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